Regulatory reform for industrialised construction

What we did and why

The BPC supported research by Queensland University of Technology, through the Building 4.0 Cooperative Research Centre, to investigate and make recommendations for regulatory reform to ensure that the benefits of industrialised construction can be realised while ensuring that consumers and building occupants enjoy a safe and quality built environment.

The construction industry is moving towards more industrialised practices, including offsite manufacturing and assembly of building components that are transported to site for installation. However, current regulation may not be well-suited to accommodate these industrialised practices.

The research sought to identify how to improve current regulations to accommodate various industrialised practices, and how to 'future proof' regulations for future innovations.

Emeritus Professor Perry Forsythe and QUT’s Dr Sara Omrani led the research.

The project was jointly funded by the Building 4.0 CRC, BPC and industry partners A.G. Coombs, Fleetwood, Lendlease Digital Australia, Standards Australia, Sumitomo Forestry Australia, and The Master Builders Association of Victoria.

This research was completed in 2024-25.

What we found

The research identified key regulatory challenges to industrialised construction processes:

• Existing compliance pathways, particularly 'Deemed-to-Satisfy' provisions in the National Construction Code (NCC) do not adequately accommodate off-site construction, leading to complex and costly performance solutions.
• Australia lacks a unified classification system for prefabricated components, resulting in inconsistencies across jurisdictions and complicating approval processes.
• Existing certification schemes, such as CodeMark and WaterMark, focus on individual products rather than entire modular assemblies, leading to fragmented compliance pathways.
• Regulatory inconsistencies across Australian states creates challenges in recognising prefabricated components approved in one state but installed in another.
• The role of building surveyors and certifiers in off-site compliance lacks clarity. Offsite construction often results in redundant inspections, either requiring multiple approvals for the same components or delaying manufacturing efficiency while awaiting on-site verifications.
• The current regulatory framework does not adequately account for emerging technologies and evolving construction practices, potentially stifling innovation in the sector.

The research proposed a series of regulatory reforms aimed at streamlining compliance and fostering innovation in industrialised construction:

• Develop standardised national framework to classify prefabricated components, ensuring consistency in regulatory interpretation and approval processes.
• Expand the CodeMark and WaterMark certification schemes to certify entire modular assemblies rather than individual products.
• Implement a nationally recognised system for prefabrication approvals, reducing the need for state-by-state re-evaluation of prefabricated components.
• Introduce a risk-based approach to inspections, where certified off-site manufacturers undergo third-party audits, reducing the need for repetitive on-site inspections.
• Implement regulatory provisions specifically addressing fire safety risks associated with modular construction, particularly at interface points where prefabricated and in-situ elements connect.
• Amend key regulatory documents, including the NCC, to explicitly recognise off-site construction as a building method with distinct compliance pathways.

Read the full report: Regulatory reform for industrialised construction

What difference this made

The research contributed to the scope and content of the Prefabricated, Modular and Offsite Construction Handbook published by the Australian Building Codes Board (ABCB) in collaboration with the Building 4.0 CRC in 2024. The Handbook provides an overview of modern methods of construction (MMC) systems and products, as well as guidance on the evidence needed to comply with the NCC and the factors influencing compliance outcomes when using MMC.

The research helped shape national developments for MMC, and informed development of the ABCB’s 2025 issues paper National Voluntary Certification Scheme for Manufacturers of Modern Methods of Construction.

The research informed the Victorian Government’s 2025 discussion paper Enabling Modern Methods of Construction through effective building regulation, which explores how MMC can be enabled through effective building regulation. Responses to the discussion paper will inform regulatory and legislative reforms to ensure efficient and effective delivery of safe, compliant, durable, affordable and sustainable buildings that take advantage of this innovation.